BP (24.26, – 0.32, – 1.30%) said on Tuesday that it expected to reach a net debt target of $35 billion in the first quarter of this year, thus meeting the threshold that the company once said it could restart share repurchase.
BP’s net debt at the end of last year was $38.9bn, when it said it was likely to increase in the first half of 2021. But earlier than expected divestiture earnings, as well as “very strong” business performance, mean it achieved its target earlier than expected.
“After meeting its net debt target, BP is committed to returning at least 60% of its surplus cash flow to shareholders through share buybacks, provided it maintains a strong investment grade credit rating,” the London based oil giant said in a statement on Tuesday
In the first quarter of this year, BP gained about US $4.7 billion from divestiture, and now it is expected that the divestiture income in 2021 will be higher than the previously announced US $4 billion to US $6 billion.